Valuation Best Practices: Roundtable discussions help align book and tax after acquisition
May 27, 2016
PitchBook Dealmakers Column
Recently, Leadership Roundtables, moderated by Valuation Research Corporation's co-CEO, PJ Patel, kicked off in cities across the country. At these small group sessions, CFOs, CAOs, controllers, tax directors and corporate development executives from public and large PE-backed companies have been discussing current issues and regulatory pressures they face in today's deal-making environment.
One recent event opened with a discussion of the current high-scrutiny environment. Patel noted, "Industry participants say they face a balancing act when addressing internal controls, audit concerns, the PCAOB, SEC, IRS and other tax organizations. Deal activity and its direction through the rest of 2016 are top of mind." But concerns at companies differ depending on which group you ask:
Corporate Development officers remain positive and continue to have a strong pipeline of deals. However, they still have a number of concerns—slow economic growth, uncertainty about inflation/deflation, election uncertainty, bridging valuation expectations and the cost of capital—to name a few.
Controllers continue to operate in a high-scrutiny environment with an eye on looming changes such as the new revenue recognition standard, lease accounting rules and continuing evolution of goodwill accounting.
Tax Professionals continue to seek tax-efficient structures while attempting to minimize tax risk. Tax groups are also facing pressure from domestic and international tax organizations while considering new OECD thoughts around BEPS/transfer pricing. Internal control considerations continue to be top of mind.
Dealmakers have brought up many significant issues during the roundtable sessions—such as inversions, valuing customer relationships and reconciling the premium paid in strategic deals—helping reveal the multi-faceted issues faced by accounting, finance and tax professionals at public and private companies.